Precious metals such as silver and gold act as a reliable source of wealth. This is because gold and silver exist in limited quantities and have inherent properties with real value, which is why it is no coincidence that gold and silver have been recognized as a medium of wealth by virtually every civilization for thousands of years.

Back in 1964, a gallon of gasoline cost about 25 cents in the United States. That’s right. Believe it or not, way back in 1964, you could buy a gallon of gas for a quarter.

It just so happens that 1964 was the last year that the US Treasury minted silver coins, including the humble quarter.

(Actually, any numismatist worth his salt will tell you that the so-called Washington quarters minted between 1932 and 1964 weren’t made from 100% pure silver — but at 90% silver and 10% copper, they were pretty darn close.)

Now fast forward to this week.

Depending on where you live, the national average price of a gallon of gasoline was approximately $3.50 per gallon. Meanwhile, the melt value of a 1932-1964 Washington quarter was hovering around $5.88 — which means that a silver quarter that was used to buy a gallon of gas in 1964 still has enough value to buy a gallon of gas (and then some) almost fifty years later.

The lesson here is that precious metals such as gold and silver act as a reliable store of wealth. That’s true because gold and silver exist in finite quantities and have inherent properties with real value.

It’s no coincidence that gold and silver have been recognized as a medium of wealth by virtually every civilization in the world over thousands of years.

On the other hand, unlike gold and silver, a fiat currency (like the US dollar) has no inherent intrinsic value. Nada. None. Zilch. And although fiat currencies efficiently facilitate commerce by acting as a medium of exchange that is far preferable to bartering — just like silver and gold do — their value is based purely on faith. I know.

Of course, the biggest downside to fiat currencies is that they can be created out of thin air with impunity, as the Federal Reserve has been doing to the US dollar with alarming frequency.

Over time, excessive money printing greatly diminishes the value of the currency and the resulting effects can be seen via price inflation. If things get too out of hand, then faith in the currency begins to wane and hyperinflation can eventually result, which typically leads to the death of the currency and a painful economic collapse.

Here’s one more example to think about: Let’s assume two poor saps became stranded on a deserted island in 1964. Let’s also assume that both castaways had $10 when they washed ashore; the only difference is the first person had a $10-bill in his wallet, while the other guy had 40 silver quarters in his pockets. Assuming the two waifs were finally rescued in 2012, the guy with the silver quarters would have 23.5 times the purchasing power ($5.88 x 40 silver quarters = $235.20) of the guy with the $10-bill, which just goes to show how pernicious inflation can be over time — even at relatively low rates.

The bottom line is that precious metals such as gold and silver will not necessarily increase your wealth over the long haul, but they will preserve the hard-earned wealth you’ve accumulated over your lifetime. That’s important to know. Especially if you’re like me and beginning to have very serious concerns about the continuing viability of certain fiat currencies — and the US dollar in particular. More on that later.